Pravah January, 2011

food for thought:

from the faculty corner:

Employee Luca Pacioli – The Father of Accounting

by Prof. B.C.M. Pattnaik
“Pacioli worked with Leonardo da Vinci at Milan
in 1496, where he invented the golden ratio.”

opinion poll:

Will Obama’s visit to India be fruitful?

by Team Pravaha

the health corner:

Top FIVE Facts

about DIABETES!
by Nitish Kumar Singh
A silent epidemic that has, according to WHO, affected
246 million people. This is almost 6% of the world's
adult population.
 Pravah
An initiative by the students of KIIT School Of Management

Editors
Shikha Patnaik
Ankita Roy

Team Pravah
Ravi Jain
Sandeep Satapathy
Priyanka Das
Sivananda Pati
Devangi Chauhan
Anshuk Sengupta

Designed by
Sivananda Pati
Shikha Patnaik

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From the Editors’ Desk
The Literary Club was inaugurated with a grand opening on 8 September, 2010.
Prof. A. K. Sar, Honorable Dean, KSOM, lighted the lamps and officially unfolded
the first issue of the news letter. The inauguration was followed by students
enthusiastically participating in the games organized by the club and cultural dance
shows by the students of KSOM. The program concluded by a prize giving
ceremony to the winners of the competitions held by the club prior to the opening
ceremony.

The Literary Club salutes the zeal shown by the faculty members and the
students of KSOM. The second issue of the news-letter is here before you and we
warmly welcome your valuable comments and feedback, which would encourage
us and help us in our future endeavors. We hope the ongoing support and
participation will continue.

Shikha Patnaik and Ankita Roy

MBA-I

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 Contents

Faculty Corner
Luca Pacioli 05 – 06
Raja, Raju and the Raaj 07 – 08

Students’ Corner
Employee Engagement 09 – 11
Green Marketing 12 – 15
Top Five Facts about Diabetes 15
Corporate Social Responsibility 16 – 17
Management Jokes 17
Cricket ‘n’ Examination 18
Desperate Sigh 18
The Need of a True Leader 19
World on Steroids 20 – 21

The Pravah Corner

Management Quiz 22
X- Word 23

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 from the faculty corner

Luca Pacioli:

Father of Accounting
by Dr. B.C.M. Patnaik

Fra Luca Bartolomeo de Pacioli or Paciolo (1445-1517) was an Italian Mathematician and
Seminal contributor to the field known as Accounting. He was also called Luca di Borgo after his
birth place, Borgo Sansepalcro, Italy. Luca Pacioli‟s father was Bartolomeo Pacioli, but Pacioli
lived as a child with the Befolci family in Sansepalecro, which was the town of his birth.

Little of Pacioli‟s early life is known. Pacioli moved away to Venice to enter the service of
the wealthy merchant Antonio Rompiasi to have been chosen as a tutor to Rompiasi‟s three
sons. However, Pacioli took the opportunity to continue his mathematical studies at a higher
level. During this time Pacioli gained experience both in teaching and also in business for his
role helping with Rompiasi‟s affairs. It was during his time in Venice that Pacioli wrote his first
work. This was completed in 1470. Pacioli then travelled to Rome where he met Leone Battista
Alberti. Leone helped him to study theology and, he became a friar in Franciscan Order. In
1477, Pacioli, began a life of travelling, spending time at various universities teaching
mathematics, particularly arithmetic. He taught at University of Perugia from 1477 to 1480 and
while there he wrote a second work on arithmetic. He taught at Zara and there he wrote a third
book on arithmetic texts were published. After Zara, Pacioli taught again at the University of
Perugia, then at the University of Naples, then at the University of Rome. In 1489, after two
years in Rome, Pacioli returned to his home town of Sansepolcro. There he was banned from
teaching in 1491. During this time in Sansepolcro, Pacioli worked on one of his most famous

1
book the Summa de arithmetica, geometria,proportioni et proportionalita which he dedicated to
Guidobaldo, the duke of Urbino. Pacioli travelled to Venice in 1494 to publish the Summa, a
synthesis of mathematical knowledge of his time, is also notable for including the first published
description of the method of keeping accounts that Venecian merchants used during the Italian
Renaissance, known as double –entry accounting system. Although Pacioli codified rather than
invented this system, he is widely regarded as the “Father of Accounting”. The system he
published included most of the accounting cycle as we know it today. He described the use of
journals and ledgers, and warned that a person should not go to sleep at night until the debits
equaled the credits! His ledger had accounts for assets (including receivables and inventories),
liabilities, capital, income and expenses- the account categories that are reported on an
organization‟s balance sheet and Income statement, respectively. He demonstrated year-end
closing entries and proposed that trial balance be used to prove a balance ledger. Also, his
treatise touches on a wide range of related topics from accounting ethics to cost accounting.

Pacioli worked with Leonardo da Vinci at Milan in 1496 where he invented the golden
ratio. In 1510 Pacioli returned to Perugia to lecture there again. He also lectured again in Rome
in 1514 but by this time Pacioli was 70 years of age and nearing the end of his active life of
scholarship and teaching. He returned to Sansepolcro where he died in 1517 leaving
unpublished a major work De Viribus Quantitatis on recreational problems, geometrical
problems and proverbs.

***

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 Raja, Raju and the Raaj
by Prof. R. N. Subudhi

Again comes a defiant Raja (2G-spectrum), at a time when the saga of Raju, of Satyam, is still
fresh in our mind. What a Raaj (Governance) we have? When we add other deadly bouncers
like CWG mess or Adarsh Society (or any such example from any of so-called four pillars of
society: Legislature, Judiciary, Executive & Press), it is perhaps enough to shatter one‟s faith
and confidence. May be, it is enough to de-motivate the young, aspiring minds, like those of our
graduates.

Who is the master culprit then? Can we just blame the likes of Raja or Raju, alone? For
sure, Raja is not doing, or had not done, the „crime‟ for himself or by himself, alone. It was
surely done with the knowledge of many others, including the Raaj. Possibly, we can also have
similar analogy about the Satyam and the CWG mess. But what was the compulsion for them
(or for those who would be in news, for wrong cause, in future)? Possibly, like the last thought of
the mythological character, Dashyu Ratnakar, the thief, who later had a transformation as
Valmiki (the saint, who wrote Ramayan), they all have had such „compulsions‟. That urge, for
corrupt practice, or compulsion, „convinces‟ a person to do such serious act (call it crime), which
he often justifies the deed. What could be the cause of such an urge or compulsion?

It could be a social compulsion. It could be a pressure, or very high expectations from

family, peers, political parties and the company itself. The cause could be the great socio-
economic imbalance that plagues many nations over the globe.

Starting from the very high premium that we now pay for our children‟s education – even
a government sponsored institution like IIM now charges over Rs.12 lakh for an MBA seat – at
every stage we directly or indirectly invite pressure on ourselves. Even have-nots are competing
with those families who can really afford such high-premium-fee, by taking loans up to their
nose. Loan for a house, loan for car, loan for children‟s marriage (which are very expensive and
grand affairs) and possibly a final loan for cremation!! A self-damaging, mad competition! Non-
sustainable high aspirations, leading to that „compulsion‟! It is clearer from the present reality of

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MP/MLA „status report‟: one who collects more (mostly indirectly) for the party is the most able
leader!

So where are we heading at? What are we doing? For what are we doing? Dashyu
Ratnakar may defend himself by saying that, what he did was for other members. But all those
„others‟ in the society may not agree with or support that. A self realization may help all of us.
Though the timing of Ratan Tata‟s reflection (“… a minister wanted Rs.15 crore as bribe; but I
wanted my life back; wanted to enjoy things that I wanted to do…”) is somewhat questionable
(Niira Radia tape-issue now crops up), but it is part of that „realization‟. Again the very recent
initiative by some IIM-A students to start helpline on corruption, is a bold positive step.

Some of us have to start it, some time, in our life.

____________________________________________________________________________

[Above comments/ opinion/reflections are of the author and not of the organization or employer.]

1. Source: http://www.rediff.com/business/slide-show/slide-show-1-a-minister-had-asked-for-rs-
15-crore-bribe-reveals-tata/20101115.htm

2. Source: http://www.rediff.com/business/report/iima-students-to-start-helpline-on-
corruption/20101129.htm

____________________________________________________________________________

Opinion Poll
Do you think Obama's visit to India will have any positive impact on the country's
economy?

Yes 72%

Can't Say
No 25%
No
Yes
Can't Say 3%

0% 20% 40% 60% 80%

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 food for thought

Employee Engagement
by Manisha Misra, MBA - I

In this fast moving world, where no one has time to spare even for telling time, there arises a
question of what could be the solution for reducing the tensions and complications of the clutter
which we call as “life”.

When we think of how an organization works with people managing daily hectic
schedules, meeting deadline requirements and ensuring job security, we forget to see the big
elephant staring right at us across the room. I‟m actually referring to the word which leads to
heart malfunction, depression and even death. The “S” word. “Stress”.

Organizations are looking for ways to reduce the strain of issues cropping from a
stressful economy and exhausted resources. There is a growing need to emphasize on keeping
employees free from these issues so that they maintain a productive and motivated work
lifestyle. Even though the pay package may add an extra “zero” at the end, the work load stress
keeps a silent presence.

There is a solution to all this and that‟s where the concept of employee engagement
comes in. I came across this term while reading a famous article by David Cohen and was truly
inspired by it. In his research he came across the fact that companies with the highest
engagement scores are more profitable, offer better returns to shareholders, suffer less
turnover, theft, absenteeism and accidents. They are also more productive, and have provided
higher levels of satisfaction to their customers. In one survey, it was said that the lack of
engaged workers costs US companies more than $350 billion annually.

What does employee engagement mean?

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Well the answer lies in the term itself but it has been defined by the U.S. Conference Board as
"a heightened emotional connection that an employee feels for his or her organization, that
influences him or her to exert greater discretionary effort to his or her work".

It is not just any trendy concept but it‟s much more. Employees have to be made to feel
that they are a very integral part of the company they belong to .It can be done so by making
them realize their daily contribution to the company‟s success. This automatically leads to
employee efficiency and organizational effectiveness .And we can achieve this through
employee engagement, which is the ability to capture the heart, mind and soul of employees to
instill an intrinsic desire and passion for excellence.

The Employee Engagement Model

Here is a model that lays out the roadmap to increase employee engagement. The best way to
increase employee engagement is to focus on creating a culture of engagement. Culture can
include the practices, shared mindset and ethos of an organization. Once the culture is created,
engagement becomes 'the way we do things around here' and it does not have to be recreated
year after year.

The model talks about the five most important drivers of a culture of engagement. These were
selected after reviewing a wide range of research studies. Each driver must be translated into
practical systems, practices and structures that are embedded in the organization.

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 1. Two-way feedback: Most organizations do well in terms of communication down from
management to employees. What are often missing are mechanisms for employees to
communicate up on a regular basis. Relying on a suggestion box and an annual
employee survey just doesn't do the job. Two helpful ways to ensure the upward flow of
feedback are employee town meetings and quarterly, brief, online surveys the capture
the changing concerns of employees.
2. Trust in leadership: Trust can be shattered instantly when executives appear to
suddenly change directions or seem to break promises. Building trust is a slower
process. Executives build trust by developing a clear vision of the organizations' future
and communicating this to all employees.
3. Career development: Engagement levels rise when there is a formal career
development system that includes components such as formal career tracks, mobility
systems to help employees move about in the organization, and annual career
conversations.
4. Employees understand their role in success: Employees need to understand how
their job fits into the big picture and what they must do more of and do differently to help
the business succeed. HR can help by clarifying what are the competencies, the
capacities that this particular organizations needs to grow and helping employees
upgrade their skills to match the needs of the future.
5. Shared decision making: When employees participate in making decisions, they take
feel more engaged in the organization. Decision-making needs to be pushed down to the
lowest possible level.

Employee engagement is a very important concept. There is clear and mounting evidence
that high levels of employee engagement keenly correlates to individual, group and corporate
performance in areas such as retention, turnover, productivity, customer service and loyalty.

***

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 management philosophies

Green Marketing
by Avik Sarkar, MBA - I

The moment you step out of your house and are on the road you can see the air getting
polluted– a cloud of smoke from the exhaust of a bus, a car, or a motorbike; smoke billowing
from a factory chimney; fly ash generated by thermal power plants; and speeding cars causing
dust to rise from the roads. Air pollution is aggravated primarily because of four developments:
increasing traffic, growing cities, rapid economic development, and industrialization. Air pollution
is nothing new. Ever since the discovery of fire, less-than-desirable substances have been
vented into the air. The Industrial Revolution in Europe in the 18th century saw the beginning of
air pollution as we know it today, which has gradually become a global problem.

Although environmental issues influence all human activities, few academic disciplines
have integrated green issues into their literature. This is especially true of marketing.
Businesses have been quick to accept concepts like environmental management systems and
waste minimization, and have integrated environmental issues into all organizational activities.
Terms like "Green Marketing" and "Environmental marketing" are often used.

What exactly is Green Marketing?

According to American Marketing Association, Green Marketing is the marketing of products
that are presumed to be environmentally safe. Thus green marketing incorporates a broad
range of activities, including product modification, changes to the production process, packaging
changes, as well as modifying advertising. Yet defining green marketing is not a simple task.
The obvious assumption of green marketing is that potential consumers will view a product or
service's "greenness" as a benefit and base their buying decision accordingly. The not-so-
obvious assumption of green marketing is that consumers will be willing to pay more for green
products than they would for a less-green comparable alternative product - an assumption that,
in my opinion, has not been proven conclusively.

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Why is Green Marketing important?
Humans have limited resources on the earth, with which they must attempt to provide for the
worlds' unlimited wants. In market societies where there is "freedom of choice", it has generally
been accepted that individuals and organizations have the right to attempt to have their wants
satisfied. As firms face limited natural resources, they must develop new or alternative ways of
satisfying these unlimited wants. Ultimately green marketing looks at how marketing activities
utilize these limited resources, while satisfying consumers wants, both of individuals and
industry.

Benefits of Green Marketing

Green marketing offers business bottom line incentives and top line growth possibilities. While
modification of business or production processes may involve start-up costs, it will save money
in the long term. For example the cost of installing solar energy is an investment in future
energy cost savings.

Companies that develop new and improved products and services with environmental
impacts in mind give themselves access to new markets, substantially increase profits and
enjoy competitive advantages over those marketing non-environmentally responsible
alternatives.

Why firms are practicing Green Marketing?

When looking through the literature there are several suggested reasons for firms increased use
of Green Marketing. Five possible reasons cited are:

 Organizations perceive environmental marketing to be an opportunity that can be used

to achieve its objectives.
 Organizations believe they have a moral obligation to be more socially responsible.
 Governmental bodies are forcing firms to become more responsible.
 Competitors' environmental activities pressure firms to change their environmental
marketing activities.
 Cost factors associated with waste disposal, or reductions in material usage forces firms
to modify their behavior

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While green marketing is growing steadily as increasing numbers of consumers are willing to
back their environmental consciousnesses with their dollars, it can be dangerous. The public
tends to be skeptical of green claims to begin with and companies can seriously damage their
brands and their sales if a green claim is discovered to be false or contradicted by a company's
other products or practices. McDonald's replaced its clam shell packaging with waxed paper
because of increased consumer concern relating to polystyrene production and Ozone
depletion. Tuna Manufacturers modified their fishing techniques because of the increased
concern over driftnet fishing, and the resulting death of dolphins. Xerox introduced a "high
quality" recycled photocopier paper in an attempt to satisfy the demands of firms for less
environmentally harmful products.

Many firms are beginning to realize that they are members of the wider community and
therefore must behave in an environmentally responsible fashion. This translates into firms that
believe they must achieve environmental objectives as well as profit
related objectives. Fund managers and corporate developers too, are
taking into account the environmental viability of the company they
invest in Venture Capitalists are investing in green business because
they believe it's a growth opportunity.

Britain based HSBC became the world's first bank to go carbon

neutral late last year and is now turning its 11000 buildings in 76
countries worldwide into models of energy efficiency. Firm who is very environmentally
responsible but does not promote this fact, at least outside the organization, is Walt Disney
World (WDW). WDW has an extensive waste management program and infrastructure in place,
yet these facilities are not highlighted in their general tourist promotional activities. Coca-Cola
has invested large sums of money in various recycling activities, as well as having modified their
packaging to minimize its environmental impact. Tesco is pumping $200mn into environmental
technologies to reduce the amount of energy they use by 50% compared with 2000 levels ,by
2010.In addition to building 80 new eco stores across Britain over the next year –the greenest
of which will be constructed of recycled materials and will burn food waste for electricity-they
are also making small changes that could have big results. They are paying customers not to
use plastic bags which they expect would cut consumption by 25% in two years. Renewable
Energy Corp., a Norwegian Solar energy company, had the world's largest ever renewable
energy IPO in May. $30 million is what Goldman Sachs invested in Canadian alternative-fuels
Company Logen. It was one of the several green ventures for ex-Goldman and Nature

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Conservancy head Henry Paulson, US Treasury secy. According to a recent report from the
climate group, an international environmental charity, 43 multinationals – including Bayer,
DuPont – saved a combined $11.6 billion last year by improving energy efficiency ,reducing
waste output and harnessing solar power. GE's ECOIMAGINATION campaign to cut carbon
emissions ,partly by selling low emissions products ranging from power plants to fluorescent
light bulbs have raked in $10.1 billion last year up from $6.2 billion in 2004.

Green marketing covers more than a firm's marketing claims. While firms must bear
much of the responsibility for environmental degradation, ultimately it is consumers who
demand goods, and thus create environmental problems. One example of this is where
McDonald's is often blamed for polluting the environment because much of their packaging
finishes up as roadside waste. It must be remembered that it is the uncaring consumer who
chooses to disposes of their waste in an inappropriate fashion.

***

Health Corner: Top Five Facts about Diabetes

by Nitish Kumar Singh, MBA - I

1. Diabetes is a silent epidemic and according to WHO there are 246 million people in the world living
with diabetes. This is almost 6% of the world's adult population.

2. Diabetes in Asians is five times the rate of the white population

.3. India is the diabetes capital of the world. It is estimated that currently there are 40 million people with
diabetes in India and by 2025 this number will swell to 70 million.

4. Central obesity or apple shape of the body and insulin resistance is the main reason for diabetes
increase in Indians.

5. Diabetes causes 6 deaths every minute and one in 20 deaths in the world is due to the condition. Every
year it is estimated that 3.2 million people in the world die due to the diabetes or its related causes.

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 management philosophies

C$R: Corporate Social Responsibility

by Shivesh Chandra, MBA - I

Corporate Social Responsibility (CSR) is the continuing commitment by business houses to

behave ethically and contribute to economic development while improving the quality of life of
the workforce and their families as well as of the local community and society at large,
according to The World Business Council for Sustainable Development.

Many corporate houses are already into social work, yet their efforts are not as fruitful as
it would have been mainly because they put business against society when clearly these two
are interdependent. They consider CSR as a cost, a constraint, or a charitable deed which in
reality can be a source of uplifting the weak and under privileged sections of the society as well
as in building a good image of the company.

CSR can solve many social ills as well as give a company a competitive edge when
approached strategically. The need is to identify and tackle social issues that one is best
equipped to resolve and that if eradicated can give the greatest competitive advantage. (To
address public concern about auto emissions, Toyota used its technical expertise to develop the
hybrid engine Prius. This Prius not only significantly reduced pollutants but also gave Toyota an
enviable lead over rivals in hybrid technology.)

To enter Indian market, Nestle needed to establish local sources of milk. It received
government permission to build a dairy in the district of Moga. But in Moga, farmers were
impoverished and failed crops added to their difficulties. They were not able to feed their cattle
and because of this, there was high death rate of calves. Initially, Nestle built several
refrigerated dairy (as milk collection point in Moga town) and sent trucks to these dairies to
collect milk. Nestle also sent veterinary doctors and agronomists to villages. They taught
farmers scientific methods of farming. With financial and technical assistance from Nestle,
farmers dug deep bore wells. This improved irrigation, productivity increased, calves‟ death rate
decreased and milk production increased. With increasing revenue, Moga‟s standard of living

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improved. Meanwhile, Nestle gained a stable supply of high quality milk and saw the demand
for its products increasing in India.

Successful corporations need a healthy society. Education, healthcare and equal

opportunity are essential to a productive work force. Ultimately, a healthy society creates
expanding demand for business, as more human needs are met and aspirations grow. Any
business that pursues its end at the expense of the society in which it operates will find its
success to be temporary. The natural dependence of corporations and society implies that both
business decisions and social policies must follow the principle of shared value ie. Choices must
benefit both sides. A temporary gain to one will undermine the long term prosperity of both.

A more common approach of CSR is philanthropy. This includes monetary donations

and aid given to local organizations and impoverished communities in developing countries.
Community based development generally leads to a more sustainable development.

***

Management Joke

A sales rep, an administration clerk, and the manager are walking to lunch when they find an
antique oil lamp. They rub it and a Genie comes out.

The Genie says, “I'll give each of you just one wish.”

“Me first! Me first!” says the admin clerk. “I want to be in the Bahamas, driving a speedboat,
without care in the world.” Puff! She's gone.

“Me next! Me next!” says the sales rep. “I want to be in Hawaii, relaxing on the beach with my
personal masseuse, an endless supply of Pina Coladas and the love of my life.” Puff! He's gone.

“OK, you're up,” the Genie says to the manager. The manager says, “I want those two back in
the office after lunch.”

Moral of the story:

Always let your boss have the first say.

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 Cricket ‘n’ Examination
Pitch – Examination Hall
by Ankita Das, MBA – I
Batsman – Candidates appearing for exam

Bowler – Question Paper

Fielder - Invigilator

Spin Bowling – A confusing question

Pace Bowling – A tough question

Umpire – Bi-eye while copying

Appeal – Warned when copying

Catch – Caught while copying

Bowled – Debarred

Run Out – Unable to finish the paper

Clean Bowled – Failed in exam

Wide – Question out syllabus

Century – Scoring full marks

LBW – Failed because the guy in front of

you had not prepared well!

poetic thoughts

Desperate Sigh
by B.Sai Shrita, MBA – I
The loneliness as darkness haunts me. Catharsis is what I suppose I‟m going through,

In the hope of light I search for Thee… Literature has taught me this much though…

Looking at the Buzzing streets and starry sky, The disturbing passions have found a safe outlet,

My vision blurs and tears drop dry. “In the mind‟s eye” it looks like a talent.

The world seems to enjoy while I lament, But, the heart knows its own tragedy,
The Need of a True
And I feel tortured without any extent.
Leader
The hidden depths of my own personality…

It‟s on that I cannot tolerate another‟s by

joy Roshni Mukherjee, MBA - I

But, why is it that I‟m always left to sigh?

14

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 The Need of a True Leader
by Roshni Mukherjee, MBA - I

A car stopped by and few coins fell down from the wallet of a gentlemen sitting in the car. A
poor lad came running and picked them up. He gave a glance towards them and gave it back.
The gentlemen asked him to keep the coins but he refused. When asked as to why did he
refuse he said, “The coins are mutilated and for a poor fellow like me it‟s of no use.”

Every year our country suffers from the hazards of nature. Indian Government comes
into the forefront by rendering its services especially in forms of subventions. Before every
voting session voters crave for votes like beggars. The amount receivable is a huge success but
the amount payable becomes almost nil. The overall dynamic position that our country today
holds is also because of our beloved politicians. The fund flow and cash flow system is
managed well by our politicians and is so very dynamic that at times of emergency liabilities
increase and become the prime reason for not being able to help the needy countrymen.

World Bank estimates that 456 million Indians (41.6 % of the total Indian population) now
live under the global poverty line of $1.25 per day (PPP). This means that a third of the global
poor now reside in India. Caste explanations of poverty fail to account for the urban/rural divide.
High growth rates, openness to trade and investment, promotional state, social expenditure
awareness, macro stability supported by over-reliance on agriculture and high population growth
rate all caters to the fulfillment of the cause –“Poverty and inequality”.

At the same time, hunger has become a problem for rural India. As of 2006, the
government has spend less than 0.2% of GDP on agriculture and less than 3% of GDP on
education. Increasing stress on education, reservation of seats in government jobs and the
increasing empowerment of women and the economically weaker sections of society, also
makes our country stand first in the queue of inequality.

So where is our country heading to? An undefined path headed by a bunch of

misleading people. In order to cater the needs of our countrymen someone like Baba Ramdev is
required. We need fresh air to continue living. The fresh air is our leaders. Our politicians. It‟s
high time that we take care of the power we have – the democracy. Our country needs another
Swami Vivekananda to arise, awake and stop not till the goal is achieved.

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 World on Steroids
by Smruti Ranjan Tripathy, MBA - I

History of human civilization is full of mistakes. Be it the French revolution, the World Wars, the
Great Depression or the recent financial turmoil. All these have caused immeasurable damage
to the society; on the flip side these they have taken societal learning to the next level.

During the French Revolution (1789-1799), radical social and political changes were
brought in to the French as well as the whole of the European society. Feudal and aristocratic
ways of administration gave way to liberal politics. Hence the idea of citizenship and inalienable
rights were born. Similarly, the World Wars taught us about mutual exclusivity. No country is
immune to the fall out of a global disaster.

Then came the financial crisis in 2008, whose effects are still unfolding. Like many
historical disasters in the past this also had few important lessons for the human civilization. Let
us have a look at few of them.

It questioned the western way of doing business. Western world which believes markets
are self correcting and regulations are roadblocks for growth, was forced to think over it again.
In fact they accepted it quite quickly, which was quite evident from Obama‟s thumping victory
over the republicans. This is now being followed by sweeping Wall Street reforms, Volcker
committee report, scraping of FSA in UK, upcoming Basel committee reports on bank capital
regulation and on and on.

It made huge shift in global power. Suddenly Asia is now seen as a world leader. Its
voting power has increased in the IMF and World Bank (though marginally). Suddenly Shanghai
Composite has a more impact on global market trends than Dow or Nasdaq. The word “3rd world
country” (coined by French demographer, anthropologist Alfred Sauvy) is now obsolete. Many
MNCs are looking eastward for growth. In the recent quarterly report Pepsi co. has admitted that
it had a profitable quarter, thanks to the demand in the developing markets. Many global giants
are planning to shift their global headquarters to Asia. So the mantra is loud and clear.”GO
EAST”.

16
It had a vital lesson for money making. Many people cried foul about the hefty executive salaries
and bonuses. But was that all justified? Nobody is envious of the wealth Bill gates or Warren
buffet has made. The reason being, they got it all as a byproduct of creating huge value for the
society. On the contrast we had Tony Hayward (ex CEO, BP) being removed from his job with a
million euro compensation after all the damage he caused in the gulf of Mexico. So the crisis
forced us to think over wealth distribution.

Another important aspect of business that the crisis taught us is to be innovative. It

forced us to go for market based innovation and to think over certain huge challenges that the
world is about to face in terms of energy, environment, and food. Few of the results being green
supply chain management initiatives by biggies like Wal-Mart and IBM. Prominent business
thinkers like the late C. K. Prahlad in his much acclaimed book, The Fortune at the Bottom of
the Pyramid, had written about the untapped rural world market which comprises of around 4
billion people. Many companies like HUL have already tasted success in these markets and it is
time for others to follow suit and explore the opportunities. In fact, indirectly due to the crisis, the
consumption pattern is set to change globally. With wage hike of Chinese laborers and the
somewhat successful implementation of NREGA in India the consumer base is gradually
shifting eastward.

The crisis also compelled us to think of markets that were never ventured before, like
Africa. As a continent of hope it has lot to offer to the world‟s GDP as a whole with its vast
resources. Many companies realizing that have already joined the bandwagon, be it Bharti from
India or Chinese companies acquiring mines and building infrastructure for future endeavors.

The turmoil has increased the accountability on governments‟ part. It has questioned
excessive spending and forced them to go for austerity drive. Though there are opposing views,
Paul Krugman’s vs Nial Ferguson’s, the good thing is at least it has sparked the debate in the
society.

Another major change it has brought in is sustainability. It has demanded all the B-
schools to prepare globally responsible future managers. For population at large it has forced
them to be global citizens as no one can remain isolated from anything happening in one part of
the world.

So what does it have for us as a country or future global managers? Here I think we
have an upper hand over our peers. As everyone keeps saying we have our fundamentals in

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 place. But is that enough? Should we be satisfied by that? The crisis has made it loud and clear,
the place for the world leader is up for grabs.

Peter Sange in his book Fifth Discipline has expressed an interesting view: My intuition
is they (India and China) will move somewhat together but in very distinctive ways. But I think
the thing that will be really common to both of them will be the fact that they won’t be able to do
this without reconnecting to their heritage. They will have to develop a confidence that they can
do this as Indians and Chinese. They have learnt a lot from the west but they don’t have to
copy, they can’t create a Chinese or Indian version of western model. The western model itself
is basically bankrupt. It doesn’t give enough attention to the human side of development.

Finally, the opportunity is there. The stage is all set. Are you content being a developing
country or you want to lead the world? The choice is yours.

***

Management Quiz (answers on next page)

01. An advertisement that resembles a newspaper editorial or a television program but promotes a single
advertiser’s product, service, or point of view.

02. Part of every insurance policy; policy provisions that eliminate coverage for specified exposures.

03. What are the headquarters of Tata Group called?

04. Google’s new mobile platform or software.

05. Study of insurance.

06. What does C&D in Finance stand for?

07. CEO of Nomura.

08. Robert Kaplan and David Norton developed the concept which links company's current actions to its . . .
. long term goals. Name the concept.

09. In management jargon what is known as "Semiotics"?

10. With what was the Kyoto Summit concerned?

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 Across:

12. Neither check nor credit card.

X-Word!
15. Where goods and services are sold.

By Sivananda Pati, MBA – I 7. Reserve of unused or unsold goods.

1 2 1. Boss, man in charge of a company.

3 13. Wealth of person on business

10. Money lent

4 5 6
5. Buy
7
8 9 8. A written agreement
10 11
3. What customers pay and the method
12
13 of payment.

14 Down:

9. Something of positive value.

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2. Equipment in most firms today.

11. Part of the capital of a company

6. Amount of money spent.

14. To make money

4. A reduction in the usual price

Send your answers to pravah@ksom.ac.in First correct sender’s name will be published in the
next issue of Pravah.

__________________________________________________________________

Answers to Management Quiz:

1. Advertorial, 2. Exclusions, 3. Bombay House, 4. Android, 5. Actuaries, 6. Cease and Desist,

7. Robert Subbaraman, 8. Balanced Scorecard, 9. Strategy, 10. Global climate change

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